BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Ascertain Profit or Loss
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Ascertain Financial Position
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Both the above
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None of the above
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Detailed explanation-1: -In a practical sense, the main objective of financial accounting is to accurately prepare an organization’s financial accounts for a specific period, otherwise known as financial statements. The three primary financial statements are the income statement, the balance sheet and the statement of cash flows.
Detailed explanation-2: -Correct! The purpose of financial accounting is to provide useful information for outside investors, creditors, and others.
Detailed explanation-3: -Answer: The 2 objectives of accounting are – Maintaining a systematic record of all financial transactions and preparing financial reports to access the financial position of the business organisation.
Detailed explanation-4: -1. To provide useful information to the management of an organisation for the purpose of planning, controlling, analysing, and decision making. 2. To provide information to prospective investors to attract them, so that they can take rational decisions regarding their investment based on the reports.